A few issues have historically dogged the India-Sri Lanka relationship.

In October 2014, a Chinese submarine docked at Colombo with the Japanese
Prime Minister due the next day. The Indians had objected vociferously.
This time, when the Indian Prime Minister was due to visit Sri Lanka on
May 11, 2017, the Sri Lankans received a request from China for a port
call by one of their submarines.

With Sri Lanka hugely in debt due to Chinese investments at Hambantota Port
complex, possibly the Chinese wanted to put across the message that
they call the cards at Colombo now. The Sri Lankans displayed the spine
that they have by declining the request.

Prime Minister Narendra Modi’s visit,
preceded by the visit of the Sri Lankan Prime Minister to India,
earlier this year, has apparently given the India-Sri Lanka relationship
a more stable platform. Modi’s low profile Vesak Day visit to Sri Lanka
achieved a lot more even without displaying a clutch of MoUs signed.
The Chinese dragon failed to torpedo the Indian elephant’s port call.

Strategic importance of sea lanes of communications remain paramount
even after centuries, when European colonial powers extended their
influence to the Indian Ocean region. Today, the island nation sits
astride one of the busiest sea lanes of communications used by a
resource hungry China, Japan and a host of Asia-Pacific countries.

For India, Sri Lanka is vital and for Sri Lanka, India is no less.
Barely 12 nautical miles apart, any nation that dominates Sri Lanka can
actually choke the sea lanes to India. For Sri Lanka, the story is not
too different, though in another context.

The country’s cultural and ethnic connects with India are umbilical. The
predominantly Buddhist nation, a religion that traces its roots to
India, also has an ethnic Tamil diaspora that has deep linkages with
Indian people in the state of Tamil Nadu.

India, by virtue of its proximity, is also its natural trading partner.
Should the tiny island state need any assistance, India is again
geographically best positioned to respond. Beyond that, both are
democracies. Up to 75 per cent of transhipment traffic at Sri Lankan
ports is also Indian.

A few issues have historically dogged the India-Sri Lanka relationship.
The long history of Tamil insurgency and the overwhelming use of force
by the Sinhala-dominated state, especially during the final phases of
the civil war, has left a deep scar on the psyche of the Tamil
population in India.
No political party, be it in power or in opposition in the Indian state
of Tamil Nadu, will accept New Delhi hobnobbing too much with Colombo
till reconciliation in Sri Lanka is fully achieved. As such,
dispensations at Delhi are often guarded in their outreach to Colombo.

The other major impediment is the small island state viewing India as a
sledge hammer that can, egged further by their umbilical linkage with
the Sri Lankan Tamil diaspora, act against Colombo’s interests. In the
bargain, Sri Lanka has had strong relationships with extra regional
partners, with China in the lead during the tenure of the last
president, Mahinda Rajapaksa.

To limit the narrative to the recent past, the relationship dipped when
Rajapaksa was in power. The Chinese were seemingly making brazen
inroads. The best example was the development plans for Hambantota. The
Hambantota port was to be developed as a deep sea port. The project
included an international airport, a cricket stadium, hundreds of
kilometres of roads and other ancillaries. Most of it was funded by the
Chinese government as loans or Chinese FDI.

Initially, Sri Lanka had offered the development of Hambantota to India,
however, the Indians had not found the project viable. The Indian
scepticism has since proved right. The entire project is floundering.

By the time the new Sri Lankan president Maithripala Sirisena came to
power, it was mostly a case of the projects having gone too far to be
rolled back, leaving Sri Lanka at the cusp of a debt trap. Perhaps, that
is what the Chinese wanted.

Both the Sri Lankans and the Chinese are now trying to retrieve the
situation. China had asked for 1,600 acres of land to build an
industrial zone. A financial district is also being built in Colombo on
269 hectares, with 110 hectares reserved for the Chinese. Up to 80 per
cent of Hambantota has been handed over to the Chinese on a 99-year
lease. Both governments have formed a committee to salvage the project.

With such huge assets being handed over to the Chinese, an Indian
security expert, Brahma Chellany, opines, “From a Chinese-financed Sri
Lankan project, Hambantota is becoming a Chinese-owned and Chinese-run
enclave in the Indian Ocean.”

Sri Lanka has also backed the Belt and Road Initiative. Of course, the
Sri Lankan Prime Minister during his earlier visit to Japan had stated
that, “We want to ensure that we develop all our ports, and all these
ports are used for commercial activity, transparent activity, and will
not be available to anyone for any military activity.''

However, the fact remains that Hambantota is part of the Chinese
Maritime Silk Route project, which is part of the Chinese Belt and Road
initiative. It’s relevance to Chinese designs of increasing its
influence by creating logistics bases globally, can’t be wished away.

Sri Lanka has now offered the Trincomalee Port for joint development to
India. The Sri Lankan port minister wants some of the Hambantota
projects to be moved to Trincomalee. The projects now planned at
Trincomalee include an India-partnered sugar factory and a
Pakistan-partnered cement plant. Funds allocated for Hyatt Hotel in
Hambantota are also being diverted to Hyatt Colombo.
Indian Oil Corporation will also partner in the development of the oil
tank farm at Trincomalee. An old 2003 agreement between the two
countries is being revisited. The farm has 99 oil tanks and Indian
investment in the project is bound to be viewed as more strategic than
purely commercial.

Beyond Hambantota, the Sri Lanka-China relationship is quite
deep-rooted. The Chinese supply a wide variety of arms and equipment to
Sri Lanka.

Smaller nations often play a balancing game when they have two regional
powers casting a shadow on them and Sri Lanka is no exception. Chinese
domination of the island would alarm Asia-Pacific countries as much as
EU and the US. The sheer propensity of investments from China in Sri
Lanka could tip the scales in their favour, with Sri Lanka sliding more
and more into a hapless debt-ridden position. However, Sri Lanka has
experienced the fallouts of debts being incurred through its Hambantota
experience and would surely be more careful now.

Sri Lanka now opting for India as a partner to develop the Trincomalee Port
is a way of counterbalancing China. However, an island state barely 268
miles at its maximum length may find it difficult keeping two
antagonists - a dragon and an elephant - satisfied in their designated
nooks on the same small island. It’s a tightrope walk at best.

Indians can also not match the funding that China can pour into Sri
Lanka. The way ahead lies in India patching together a responsive
consortium to include the Japanese, Australians, EU and US, and possibly
a few more Asia-Pacific countries to meet Sri Lanka’s needs.

Sri Lanka, in turn, has to reflect mature strategic thinking and
disallow greater Chinese penetration in its economy or provide them
potential military assets that could further underscore the Chinese nine
dash line.

The Maritime Silk Route of the Belt and Road initiative is designed to
reinforce the objectives of the nine dash line. Sri Lankan priorities
have to remain fiscal consolidation, debt reduction, ability to exercise
strategic freedom of choice in geopolitics and social cohesion with
Tamils being integrated into the Sri Lankan society fully, as equals.